Cold pitching. It's an unfashionable topic in the startup world, and can often feel like a thankless task. But it is something which came up time and time again when we spoke to a dozen female venture capitalists earlier this year for our Changing Face of UK VC series.
As opposed to its more successful sibling of warm introductions, cold pitching is the act of sending a pitch to a funding body, most likely an angel investor or venture capital firm, without knowing the person. Like any good pitch it requires a strong hook and no shortage of luck.
With women and ethnic minority founders receiving a far smaller share of the funding pie than their white male, privately educated peers, how can they get access to venture capital firms without the sort of networks that have proved the traditional route into these hallowed hallways?
Men have long had an advantage when it comes to gaining warm introductions through traditional alumni networks or professional connections from their time at McKinsey or in investment banking. According to Diversity VC's landmark 2017 report on the makeup of the UK VC industry, only 36 percent of female founders have access to 'warm introductions', which are more likely to result in funding, against 42 percent of all-male teams.
The rise of the cold pitch
Ophelia Brown, who helped cofound Blossom Capital in 2018 told Techworld earlier this year that she never understood why you could only approach a fund based on introductions or networks.
"There are so many people starting companies today and it doesn't make sense that you need to use your network to get access to someone, so that was the reason why we wanted to encourage people to pitch us online," she said at the time.
Blossom also takes a data-science approach to the problem, building models that help them do outbound discovery.
"We feel that founders anywhere can be building a really interesting business," she said. "It's not really up to them to come and find us, but we want to go and find them. And I think that's consistent with our cold approach and asking people to pick us online."
Esther Delignat-Lavaud Rodriguez, an investor at Oxford Capital has also made it a personal mission to ease the process of cold introductions within the firm.
"We have made cold introductions easier, with a form on the website and making sure that we actually look at them and they are logged straight into the CRM, so we met a lot more cold introductions last year than before," she said.
With all of that being said: how do you make a cold introduction stand out when VC firms are receiving hundreds, if not thousands of pitches a month? We asked VCs and experienced founders for their tips to get your startup's cold pitch seen.
Cold pitching tips
The most common and pertinent advice here is to always do your research. If you reach out to a fund that doesn't invest in your sector or has clear guidelines that preclude them from investing in your company you aren't just wasting your time, you could be burning bridges.
"Learn more about the people at the fund, even check their Twitter – that way you can approach them with a short, highly personal note. You might even find the fund is involved with an event or pitching competition you can join to meet them there," advises Daria Danilina, an investor at Oxx VC.
"Figure out which VC funds accept cold inbound pitches," adds Magda Lukaszewicz, and investor at Balderton Capital. "At Balderton, we look at every cold pitch we get, and aim to get back to you within a couple of weeks."
Next up is to be concise and get to the point: what problem are you solving, how, and what have your early results been – if you have them. It's also important to avoid overhyping your company. This can be a major turn-off for investors that have grown tired of industry cliches and hyperbole. Remember: they do this every day. That being said, investors love ambition, so don't undersell your idea and how their money can help you make it a massive success.
Kelvin Au, head of venture at Founders Factory, advises its portfolio companies on fundraising. He believes that cold approaches can fundamentally work, but there are of course some important factors to consider.
If your company is pre-product and/or pre-revenue, he advises: "You need to showcase you’re in an interesting and trending space, tapping into a zeitgeist and ideally a first mover in that massive market - even if you’re in an industry that initially doesn’t sound overly exciting.
"You also need to over-index on the amazing team you have and their domain expertise and experience. If you have a product, elaborate on its USP and value proposition and make it clear if you have any evidence showing an initial pathway to product-market fit – perhaps you have pilots lined up with any corporates or major partners, for instance."
If your company is later stage than that, with some revenue to show, he advises that your organisation puts these front and centre of any cold pitch.
"I'm talking in the first few lines of your email or LinkedIn message – be that upfront," he advises.
Au also recommends focusing on reaching out to analysts or associates if you don't know anyone at the firm – "it is quite literally their job to originate and so you are far more likely to get a response," he says.
He also stresses that it's OK to follow up. But it's advisable to "leave it a week".
"Funds typically hold weekly investment/deal flow meetings – usually on a Monday," says Au. "If you give it a week to 10 days then they would likely have some kind of feedback. If you know your proposition resonates well with that investor, and if they don't have a conflict within their portfolio, there's no reason why they shouldn't take your meeting."
Isabel Bescos, an investor at Balderton Capital suggests including a video of you pitching in any emails you send.
"It makes the pitch more personable, and relatable," she says, adding that she also recommends following as many VCs as possible on Twitter and LinkedIn to help attract their attention when the time comes.
Last of all: make it easy for them to contact you, and good luck!